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Institutions Are Bullish on Crypto. What do They Know That Retail Doesn’t?

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Goldman sachs celsius

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While the ongoing crypto winter and a bearish trend have marred the crypto markets, institutional investors still seem quite optimistic when it comes to cryptocurrencies.

With this optimism surrounding cryptocurrencies, being led by big names in institutional investing such as Franklin Templeton, DBS, and BlackRock to name some, questions arise on the long-term credibility of cryptocurrencies.

According to a survey held in April this year, almost 80% of institutions seem bullish about cryptocurrencies and expect crypto to overtake traditional investment vehicles within a decade.

Let us understand the latest developments and efforts institutional investors make in embracing cryptocurrencies more closely.

Singapore’s DBS To Expand Crypto Services

DBS Group Holdings, which happens to be Singapore’s largest bank, is looking to expand its crypto-related services to 300,000 of its richest users, as reported by the Financial Times.

This move is interesting because the bank has decided to take this move amidst a bearish crypto market.

According to the move, the bank will expand its existing digital assets exchange to its larger clients. Its clientele consists of private banks, accredited investors, and other exchanges, which can manage transactions through the bank’s mobile applications.

The bank plans to expand its services and allow its customers to explore the speculative asset class amidst the reliability and established regulations of the bank.

Franklin Templeton Ready For First Institutional Crypto Account

Franklin Templeton is looking at helping offer cryptocurrency-focused separately managed accounts (SMAs) to investment professionals for the first time in its history.

The latest move by Franklin Templeton once again sheds light on a scenario where an established traditional player steps into digital assets. The $1.4 trillion asset manager realised the demand for a separately managed account that is usually favoured by institutional investors as they provide customized strategies and risk profiles, as well as additional liquidity.

With this launch, the organisation has joined hands with Eaglebrook Advisors. The first set of strategies for the users will be available by mid-October.

Roger Bayston, who heads Franklin Templeton’s digital assets department, stated in an interview that the firm’s registered investment adviser partners are looking forward to exploring alternative investment routes, which include cryptocurrencies – “But regulatory ambiguity in the US means crypto assets are not yet securities“, he added.

“Customized SMAs are a perfect delivery mechanism for these assets constructed by sound advice,” Bayston said in an email. “SMAs are a significant business in traditional finance, and we are bringing these digital assets into a high-quality product offering delivered via RIAs. This is a further extension of what we do.”

What’s in Goldman Sachs’ Mind?

The investment and banking giant is gradually shifting to cryptocurrency and blockchain. It offered its first Bitcoin-backed loan back in April this year. According to the information offered by the company, the company provided a borrower with a cash loan from its securities lending facility, with Bitcoin being the collateral in the agreement.

In an interview back in May, Goldman Sachs’ CEO, David Solomon, said he’s bullish on “the digital disruption of the financial infrastructure” in an interview back in May. He seems convinced that blockchain and other cutting-edge technologies, which are still under development, might give financial institutions a better platform to make their infrastructure more efficient.

Is There Something Most Can’t See When it Comes to Crypto?

Blockchain and cryptocurrencies have come a long way in the last decade. The fundamental nature of cryptocurrencies and how they function levels out the playing field for everyone and makes the entire process more democratic.

The transactions being made and the overall public sentiment around cryptocurrencies is something that’s there in the open and available for anyone to look into. Companies and institutional investors like Blackrock and Franklin Templeton realize the nascent stage at which the cryptocurrencies currently are and the constant innovation in blockchain technology.

It has historically been the case when many bet against the wind and sail through. While that is usually based on one or the other aspects of the entire situation, one shall conduct their due diligence before investing in cryptocurrencies.

With the overall market size going up to trillions of dollars, it might as well be the institutional investors who might call shots, as against how the case has earlier been.

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